Significance Of Residual Value In Asset Valuation

Żelazowski Konrad ()
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Żelazowski Konrad: Department of Investment and Real Estate University of Lodz

Real Estate Management and Valuation, 2014, vol. 22, issue 1, 44-50

Abstract: The construction of residual value is a key element of income methods in asset valuation. Its main task is to include asset value at the end of the forecasted cash flow period. Although it is common to apply simplified models of residual value in valuation practice, its meaning in shaping the final outcome is substantial. The aim of the article is to emphasize the role of using an appropriate formula in determining residual value in the valuation process. Moreover, alternative methods of estimating residual value will be presented together with scenarios of applying them.

Keywords: valuation; DCF method; residual value (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:remava:v:22:y:2014:i:1:p:7:n:6

DOI: 10.2478/remav-2014-0006

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